Scholarships From Chicken Feed

The fast-food industry, because it relies heavily on teenage part-time help, is cursed with an annual employee turnover rate of almost 400%. Chick-fil-A Inc., a $103-million chicken-sandwich franchise based in Atlanta, helps quell the restlessness of its young workers by offering them college scholarships. A high school student who has been with the company for at least two years, while maintaining a grade average of C or better, is eligible for a one-time, $1,000 scholarship to the college of his or her choice. Students must work a minimum of 20 hours per week to qualify.

More than 80% of the company's 6,000 employees nationwide are age 16 to 20. Since the program was started in 1976, Chickfil-A has awarded more than 1,500 scholarships worth $1.5 million; in 1983, it handed out about 475. Money spent on the scholarships is 100% tax deductible as an operating expense.

Chick-fil-A's annual turnover rate now hovers at about 50% -- virtually a miracle in the volatile franchising game. And, the company expects turnover to drop as much as 10% in 1984. "Our relatively low turnover is a phenomenon we attribute to the scholarship program " says Chick-fil-A spokesman Donald Perry. He adds that former scholarship recipients constitute about 10% of the company's outlet operators and about 30% of its headquarters staff. "In return for the scholarships, we get loyal well-trained people who often move into management tiers."

The scholarship is given out at the start of the school year in the form of a check made out to both the student and the school. The school administers the money as a fund, letting the student make withdrawals for such expenses as tuition, books, and room and board. The company sets no minimum requirements for academic performance, but operators do keep tabs on students by periodically asking to see their grades. The school returns the money to Chick-fil-A if a student leaves school. Although students are free to pursue any subjects they wish, most enroll at local four-year colleges to pursue business or management training.

Among many employees, the scholarships have imbued an abiding loyalty. One 24-year-old employee, Ralph Stephens, who finished Georgia State University with the help of a company scholarship, was recently promoted to operator of an outlet in Houston. He began his career with Chick-fil-A at the age of 13, wiping tables after school. "It's an excellent incentive to stay with the company," says Stephens. "As a young kid, I was flattered to be recognized with a scholarship, and it gave me a deep sense of obligation. I felt I owed the company something in return."